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Lord Mandelson admitted: “In 2004 when as a Labour government, we were not only welcoming people to come into this country to work, we were sending out search parties for people and encouraging them, in some cases, to take up work in this country.”

In the past senior figures have denied that they engineered immigration, and three years ago refuted suggestions from adviser Andrew Neather that they encouraged the process to make the UK “truly multicultural” as a snub to the right.

At a rally for the Blairite think-tank Progress this weekend, Lord Mandelson said that when they began the policy employment was high, but “the problem has grown” as the economy has stagnated.

They have to realise that watching people of non-British origin enter the labour market is hard for those who are finding it difficult to find and keep work.

“For these people immigration tends to loom large in their lives and in their worlds, now that is an inescapable fact, and we have to understand it, address it, engage with people in discussion about it,” he said.

Tory chairman Grant Shapps said that the admission that Labour had let immigration “spiral out of control” was “yet another damning indictment on their record on immigration.”